Any annoyance I feel at seeing the term “people-group” or even better “peoplegroup” replace words like race, ethnicity, nation etc is completely neutralized by my anticipatory excitement at watching the word hit the euphemnism treadmill in real time.

Well obviously the quote ad litteram is false… businesses discriminate between demographic groups to whom they market stuff all the time.

But how is the overall sense of what he’s saying wrong, and how is what he’s doing not consonant with capitalism? If he presents himself as pro-gay, then gay people will like Apple more. Additionally, conservatives who dislike gay marriage won’t care, because they have a victim mentality and expect everyone to view them as evil anyhow. So he’s being a shrewd businessman.

Which is why I’ve never personally found capitalism to be either an appropriate basis for statecraft, or the an appropriate target for outright hostility. When people buy products, they “vote” with their dollars. So if a shrewd businessman says something stupid, all he’s doing is exposing the folly of the current zeitgeist. He holds up a mirror to society.

If you are unable to notice the large difference between “voting with your dollars” and voting as it is done in the present democratic political system you fail at political theory.

The difference between understanding the difference and not understanding it, is the difference between getting Moldbug and not getting him.

Tim Cook is not a capitalist entrepreneur. Those have been extinct for quite some time. Nowadays you have some conmen pretending to be independent entrepreneurs, when actually they rely on protection from legislation and on government subsidies to such an extent that their level of tax consumption is only marginally lower than that of your average employee of the State Department.

Izak Reply:March 31st, 2015 at 6:21 pm

Oh, I am familiar with the argument you are making about government subsidies and everything — it’s regularly repeated by Austrian schoolers ad infinitum. Not getting something isn’t the same thing as straightahead disagreement. Admin here acknowledges that the moral tenor of politicians creates the situation here. Well, who puts the politicians in power in a democracy? God? Businesses always must bow to zeitgeist of the demos; they are completely incapable of providing one. The middle man of government is irrelevant.

And the reason for that is because capitalism is devoid of intrinsic substance. When I say “capitalism,” I mean the concept in terms of how it actually functions, not in the highly refined platonic ideal that you and other boilerplate Austrian school guys advocate, often with ethical assumptions that do not stem from “Capitalism” itself but from the moral tenor that precedes it. Moldbug is an interesting writer, but he’s dead wrong about neocameralism, and he’s dead wrong when he argues that corporations have an intrinsically right-wing character. Corporations as such are devoid of any character. Pointing out the interference of government will not change that fact. Placing limitations on government (or any other) encroachment requires a rule of law that capitalism is too intrinsically weak to provide. Capitalism can never lead anything, it only follows and picks up the table scraps. I actually agree with people who call economics the “queen of the social sciences,” with all of the feminine connotations intact.

Great way to joke about this is with smoking, once everyone smoked until the health facts got out, then the health advocates came out and shouted down anyone who was still doing it until smokers are discriminated against all the time, which was all well and good so a niche market existed where smokers were welcome. That is until the puritans went too far and legislated businesses requiring them to ban smoking.
Bans on fags, would make a great skit.

question is whether the kind of legislation discussed in that essay is what caused this humans-as-fungible-cogs-for-the-corporations state of affairs, or if it was just a side effect of corporations rising and entrenching american money worship.

(I keep getting hints of an insight vaguely drifting around in my mind and I can’t quite catch it, and I’m not sure if its banal or profound, but it seems to connect modernity, totalitarianism, money, legibility, capitalism, widespread literacy/numeracy, and nerd/autistic/book consciousness)

In the standard supply chain, to reduce risk, every company wants to make its suppliers and its customers as interchangeable cogs, while seeking to retain uniqueness themselves. This is usually done by making detailed technical specifications and then possibly patenting them so that they cannot be copied. Employees are just a unique form of supplier who exist within your own organization. So, you try to issue them very detailed and exact procedures of work. Where this process is most advanced, like mcdonalds, the employees are most replaceable.

Literacy and numeracy are a must to do either of this specification. Legibility of the entire process is assumed. Nerds are needed to design the process, but not needed to just run it.

It’s deceptive though; none of those things are true in reality or in absence of an outside pressure like a government. Take the last item. Classic non-technical mistake. No, you actually need nerds to run the process. If you think you don’t, you’re either using a very mature technology like the book or the towel, in which case you need a nerd about every OTHER week, or you’re about to run into several days of being on tech support with people who don’t know how to fix the problem.

But what you say is true in the sense that this is exactly how a certain percentage of people think: some MBA’s, some managers, definitely marketing people, but all of those people are ‘nerds’ of a sort. Tell a marketer you’ve figured out how to ‘automate’ the marketing so you don’t need them to run it? How many months does it take for your traffic to slide… ?

It’s sort of amusing what extent people will go through to try to realize this dream. Take google search. “Just Google It” is the equivalent of, “Now I don’t need anyone with knowledge or expertise. But what word do I search for?”

I love how most “neoreactionaries” nowadays claim that Moldbug is dead wrong about everything yet they keep spamming the comment sections of blogs who quote Moldbug. Of course said “neoreactionary” commenters do not offer anything more than glib dismissal of Moldbug, and claims that something is “devoid of substance” without even elaborating what they are talking about. The intellectual circlejerk around these parts nowadays is off the charts.

Capitalism and corporations are right-wing insofar as meritocracy is right-wing. If you think that right-wing politics does not involve meritocracy, that’s an interesting position. If you think that capitalism is not a sufficiently meritocratic economic system I would like to see you offer a suitable alternative. From regularly visiting this blog for two years now, I’ve seen dozens of people make your claims, without actually substantiating them or offering alternatives. I would like to think you are not like them.

I can’t help but notice how you use overly ambiguous phrases like “When I say “capitalism,” I mean the concept in terms of how it actually functions, not in the highly refined platonic ideal that you and other boilerplate Austrian school guys advocate, often with ethical assumptions that do not stem from “Capitalism” itself but from the moral tenor that precedes it.”. Let’s take a moment and marvel at the signalling condensed in this one single sentence. Without saying anything of substance you signal how much smarter and more intelligent you are than all those silly “boilerplate” austrians who believe in an (implied) overly-idealistic “platonic ideal” of capitalism, which you know has much more to do with some “ethical assumptions” that precede it, and apparently have nothing to do with it. Of course you do not waste time to elaborate to silly plebs like me what capitalism is “really like”, or what I am “confusing it with” – it is enough to simply signal that I am confused and you are enlightened, this is what the comment sections of Outside In are all about nowadays.

The rest of the comment continues in the same tone, making bold, yet very ambiguous, claims (‘corporations are devoid of character” – what does this even mean?), once again not elaborated one bit.

When you talk about “capitalism as it really functions” I do not know what you are talking about, because you never give your definition. When you say, “corporations are devoid of substance”, I do not know what you mean for the same reason. When you claim I believe in “platonic ideals” and am confusing X with Y, while you are not, without explaining what that even means, I see nothing but signalling. Either take the effort to elaborate what you are actually trying to say, or don’t bother to write a comment at all. I, along with every intelligent person reading these comment sections, would sincerely thank you.

When did I ever claim to be a neoreactionary? I even wrote that I wasn’t in a comment on your own blog. Come on, now, man. You seem very upset. Take a hot bath. It’s alright. If you didn’t get wtf I was talking about, you could have made your post a 1/4th as long and just said that.

Lookit. The title of this post is “Capitalism Today,” implying that capitalism can take a bunch of forms. It’s not even my claim.

Capitalism can function in a myriad of ways because when it’s used, its usage in real life doesn’t have much essential substance. The system of capitalism in actual use has always preceded its theory, because all action precedes theory. If you don’t like me mentioning platonic forms, I’ll try another comparison. The distinction I’m drawing is like Saussure’s distinction between “langue” and “parole.” The libertarians who enjoy Austrian school stuff offer some sort of “langue,” i.e. an abstract system of rules which tries to accommodate reality. The real-world usage is “parole,” just one of an indefinite number of versions of the abstract system put into usage, with all of the realities of human error on full display. When someone on the right says, “Ah I dunno, capitalism is pretty gay,” or whatever, they’re not even talking about how your system is bad. They’re demonstrating bad faith to the notion that your system could ever possibly be realized the way you want. It’s like criticizing Swahili as a good language for Europeans, because you know that Europeans can’t do weird little tongue clicks or whatever and don’t really want to learn.

Capitalism is an abstract, flexible thing. The corporation is as well. A corporation can be a bunch of things because it, too, is devoid of essential substance when used in reality. Corporations are not automatically meritocratic. Lots of them aren’t IRL, they only *ought* to be meritocratic (according to your thinking). I know plenty of people who have corporate jobs, and they’ll all tell you: corporations are anti-elitist, highly collectivist, anti-looking out for your own interests, pro-looking out for the corporation, they value the idea of “teamwork,” and they frequently trim down the flower that grows too high, or however the expression goes. You could then say, “Ah but then they’re not real corporations, because my definition of corporation is lfkjskljfkjfsf” or whatever, but then who cares. Your definition doesn’t work, or it just depends upon a series of conditions that people seem to resist, for one reason or another.

Most Austrian schoolers I talk to say things like “Ahhhh, but see, it’s the government’s fault,” which you just did above. OK, fine, but so what? You never explained how this interferes with my claim that people vote with their dollars, you just did some lame “you fail” internet talk and then regurgitated a pre-digested talking point that Peter Schiff would say (or whoever). All too often I hear stuff from Austrian schoolers that reminds me a lot of what it must have been to watch oral poetry performances in pre-literate societies. Nothing ever said is terribly original, it’s just a string of pre-memorized talking points resembling poetic formulas, thrown together in an improvisation.

Now. I’m not in the business of “should be,” I’m in the business of “is.” And every version of capitalism I’ve ever heard proposed involves people having a choice between competing businesses, and they support the one they like best with their money. Businesses realize this and accommodate themselves to the situation. If it’s an island full of fruity gay guys, the business will struggle to say, “We love Judy Garland, too!” If it’s an island full of cartoony pirates, the business will struggle to say, “Arrr, me matey, avast ye scalawags!” and so on. The quality of the products matter to some extent, but not always a whole lot. Let’s say the average person has a choice of buying a somewhat shitty computer and a pretty good one, but the company who builds the shitty computer says something that kowtows to their belief system while the other company doesn’t. Do you seriously think people will automatically choose the good one, because of meritocracy or whatever?

Look. Almost everyone loves meritocracy and sees it as the ideal. Stop thinking stuff like, “Nooo, the left hates merit!” or whatever. If you talk to a leftist and say “Don’t you think meritocracy is best?” then they’ll likely answer, “Yes,” not because they’re tricking you but because they genuinely believe it, whether they realize how to obtain it or not. If you think that “corporation=meritocracy,” then I suggest you take a good, long look at your own thinking and ask yourself why everyone doesn’t “get it” if the solutions are so simple. I’m not even saying you’re wrong. I’m just saying everyone else might be forever doomed to be wrong, and if that’s the case, then you might as well be just arguing to yourself, right? My claim here, for the record, extends to all of Austrian economics. I will not debate whether or not they’re correct any more than I will debate that water is wet. My attitude is: all non-falsifiable theories are right, automatically. But the possibility exists that the solutions of their foremost representatives are absolutely right in a world of flawed people who are doomed to be wrong. Hence the political failure of so many starry-eyed idealists whose intellects proved to be more pernicious than good.

What libertarians want, leaving aside stuff about patchwork and corporate governance, strikes me as exceedingly fragile. People want a rule of law robust enough to keep companies from interfering with government. Can you explain to me who would stop them? If I ran a company, my very first goal would be to find a way to tamper with government, and then get the government to give me an advantage. And if the government is kept small with a tiny bureaucracy, all the easier for me to do it with big money.

Lastly: if you think I’m arguing against capitalism, you’re not getting my point. Go up and read. I said capitalism fails as the basis for statecraft. I never said it cannot accompany a robust statecraft. Frankly, I don’t see how it couldn’t. But it alone never works as the basis. Even if someone tried to apply Moldbug’s neocameralism to reality or whatever, the main impetus driving such a thing wouldn’t even be economics. You have to keep in mind, Moldbug talked a lot about the Puritans. His neocameralism actually sounds like a solution specifically for them; a way to rehabilitate the group of people to whom he assigns so much blame. If I’m right, and the neocameral solution is uniquely appealing to Anglo-Saxons (which it seems to be — even the admin has implied that tech-comm is the Atlantean solution, which implies a somewhat non-cosmopolitan membership), then it really isn’t economics driving the state – it’s the expression of a uniquely racial viewpoint. The question of economics is secondary; a proxy to unite a cluster of people who are uniquely predisposed to disavowing their own identity in favor of universalistic abstractions (like constitutions and other inventions rooted in quasi-deistic impulses). I might be wrong, of course, but I doubt it. Without some sort of metaphysically objectivist framework, systems are always made up of people, and that is who they exist for, not the other way around. I can understand the standpoint of theonomists or whatever, because their POV is: God forms the basis of the government, and that is what government is for, not the people. That actually makes some sense to me. But such a conception can never work for economics or capitalism.

I personally don’t worry about capitalism; it doesn’t concern me, really. Capital will pretty much always be with us, whether we like it or not. But capital is always the follower, not the leader. Capitalism does not have an inner-character robust enough to be the true basis of a state. No economic system has this. Economics is the queen, now and forever. It is a capricious, protean thing.

Now, if anything I have said is still unclear to you, I will do my best to further explain my points. I am not the best writer, so I sometimes say too many ideas in too little space. As far as “signaling” is concerned, what can I say? If you think I’m little more than a pretentious jackass, you’re entitled to avoid reading anything I have to say. I am not interested in dick-swinging contests on the internet.

But this leads me to my last statement, and it’s this: I would advise you to stop being so emotional and concerned about winning arguments on the internet. If you want ideological cleavage, you can have it, but parts of your post sound offended, as if I’ve invaded some sort of “safe space” or something. I’ve criticized you for this before, and it’s one of your biggest flaws. I’ve noticed you can be brilliant very often, but it’s usually about the stuff you’re least emotionally attached to. You should know this about yourself.

Problem with meritocracy is that it can be corrupted. Just shift the basis of merit and you have serious problems. It also seeks to place position on an abstraction. Is this really the best policy?

As for “uniquely predisposed to disavowing their own identities in favor of universal abstractions” I’ve been moving towards this quite heavily recently. Abstractions really do seem to be an obsession of Atlanticists. The order really does seem to be

1) use reason to deduce an abstract idea of how things are
2) apply deduction to the world
3) continue applying the abstract deduction to the world. If not working, then world must be wrong.
4) repeat, repeat, repeat.

The Antlanticist tendency is universalism, which isn’t quite the same thing. Excessive abstraction is the other guys. Fogs of theory begins at Calais.

vimothy Reply:April 1st, 2015 at 9:42 am

Corporations are quite interesting from a theoretical perspective. The typical corporation is an island of command and control in a market economy. So how do you explain the failure of the market to penetrate these organisations? Why, if the market is such an efficient allocator of economic resources, is it not made use of within corporate structures?

First thing – stop worrying about my emotional state. Your last comment was bad, borderline terrible, you know it was, stop trying to imply I am emotionally unstable or whatever (here’s the signalling once again!).

“When someone on the right says, “Ah I dunno, capitalism is pretty gay,” or whatever, they’re not even talking about how your system is bad. They’re demonstrating bad faith to the notion that your system could ever possibly be realized the way you want.”

Yes, they are signalling, I already mentioned this.

“Capitalism is an abstract, flexible thing. The corporation is as well. A corporation can be a bunch of things because it, too, is devoid of essential substance when used in reality. ”

“Corporation” has a dictionary definition. If you are in doubt about the meaning of something, or just have no idea what it means, the intellectually honest thing is to admit so, and look it up in the dictionary rather than claiming “it has no meaning”, simply because of your own ignorance. In short a corporation is a legal entity, usually created for commercial business purposes, owned by a bunch of shareholders, yet legally distinct from them. The shareholder’s ownership rights to the corporation are proportional to the amount of shares they hold. And here is an easy beginner level formulation of what capitalism is – when all property is formalized and private (exclusive), you have capitalism. When not all property is private and formalized it is not really capitalism (might be close though), and depending on how much of total property is not private and not formalized it might be closer to something like communism, in which nothing is private and nothing is formalized.

” You never explained how this interferes with my claim that people vote with their dollars, you just did some lame “you fail” internet talk and then regurgitated a pre-digested talking point that Peter Schiff would say (or whoever).”

Voting with your dollars is somewhat akin to shareholder voting rights in corporations (see, I am making this super easy for you at this point) but without the ownership stake in the corporation part. The difference between “voting with your dollars” and voting in a democracy is that in the first system your voting power is proportional to your wealth, in the second it is not. If you still do not realize the practical differences between the two, this is a doomed discussion. Throughout the majority of history there has been an informal voting with your wealth in politics almost always. Today we call it lobbying. The problem with lobbying is that it is informal. Reality cannot be legislated away so there will always be something like lobbying in any type of government from a theocracy, through an absolute monarchy to a modern democracy. You can never get rid of it, yet people attempt to legislate it away, making this cluster of influence informal instead of formal. And when something has power, but only informally this invites responsibility. Formalize it- privatize the government, chop it into shares and auction it off and you solve the problem of informality. The whole problem with governments nowadays is that they are this big chunk of informal property, nobody really knows who owns it, because by design no one is supposed to own it (which is retarded), which of course cannot work, so you get something highly disfunctional and obscure in its activities. This is one of the reasons why the corporate structure is a good alternative model because there ownership is clearly formalized.

Now, going back to your previous claim of “I know plenty of people who have corporate jobs, and they’ll all tell you: corporations are anti-elitist, highly collectivist, anti-looking out for your own interests, pro-looking out for the corporation, they value the idea of “teamwork,” and they frequently trim down the flower that grows too high, or however the expression goes.”

As you note, I already mentioned what is the problem with most modern corporations – they are quasi governmental entities. They are still corporations, they just live off government money. The modern democratic system is official egalitarian voting for the masses (quite anti-meritocratic) and unofficial lobbying for big businesses. Nobody know how much influence anyone has because nothing is formalized. It is pretty much a free for all – everyone is trying to get a piece of the pie called “public property” which is stolen and then deformalized private property. Note – if it was stolen, but remained formalized, we would be in a much better condition. A large part of historical governments functioned just like that – they were created and grew by stealing property, but at least kept it formalized which ensured at least some degree of responsibility and effectiveness. Hoppe discusses exactly this in his comparison of monarchies and democracies. The modern political system is designed to have immensely powerful, yet extremely irresponsible governments. Naturally everyone else wants to dip his hands into this honeypot of power minus the responsibility (who wouldn’t), and everyone is theoretically allowed to, because according to democratic ideology everyone is a part of the state! And because in theory everyone is a part of it, and everyone can one day (theoretically) get his turn and wield some tasty power to enrich himself, nobody is really motivated to try to make government smaller or more responsible. They are motivated to do exactly the opposite, and that is what we see happening. Corporations do it too, doing everything possible to get some lasting influence in the State Department either by paying them off, or signalling their loyalty to the Cause of the communist bureaucrats and intellectuals, so that they can secure their market share or grow it at the expense of their not so politically savvy competitors. It is not about making good products and satisfying consumers, it is about satisfying the requirements of the state religion. And as you aptly notice, no, this doesn’t look like meritocracy at all. Gee, I wonder why?

“My claim here, for the record, extends to all of Austrian economics. I will not debate whether or not they’re correct any more than I will debate that water is wet. My attitude is: all non-falsifiable theories are right, automatically. But the possibility exists that the solutions of their foremost representatives are absolutely right in a world of flawed people who are doomed to be wrong.”

So what are you saying here? Am I wrong, are austrians wrong? Are we all wrong? Brushing all the fluff of these several sentences away I read something like this “I will not debate whether you are wrong, you are probably right in your theories, but your theories are wrong in reality”. If my theories are wrong in reality wouldn’t that make them wrong theories? If so, how are they wrong? Oh but wait, you said you are not going to argue those theories are wrong…you will just argue they are wrong in reality. Uhm…what? Do you not get confused when re-reading your own comments?

“People want a rule of law robust enough to keep companies from interfering with government. Can you explain to me who would stop them? If I ran a company, my very first goal would be to find a way to tamper with government, and then get the government to give me an advantage. And if the government is kept small with a tiny bureaucracy, all the easier for me to do it with big money. ”

But I don’t want this at all (see above). On the contrary, I want government itself to be a private shareholder company.

“Lastly: if you think I’m arguing against capitalism, you’re not getting my point. Go up and read. I said capitalism fails as the basis for statecraft. I never said it cannot accompany a robust statecraft. Frankly, I don’t see how it couldn’t. But it alone never works as the basis.”

Is private property a good basis of government? If yes, you might want to review your claim here, if not, well, you should be happy with things as they currently are. A major part of historical governments were based on formalized private ownership. Those were much better than what we currently have nowadays and those are much closer to a government based on capitalism than what we presently have.

” If I’m right, and the neocameral solution is uniquely appealing to Anglo-Saxons (which it seems to be — even the admin has implied that tech-comm is the Atlantean solution, which implies a somewhat non-cosmopolitan membership), then it really isn’t economics driving the state – it’s the expression of a uniquely racial viewpoint. The question of economics is secondary; a proxy to unite a cluster of people who are uniquely predisposed to disavowing their own identity in favor of universalistic abstractions (like constitutions and other inventions rooted in quasi-deistic impulses).”

I am not an anglo-saxon, nor a puritan, or any other form of protestant (I am not even a catholic) and neocameralism appeals to me quite a bit. So, your point here seems quite misguided.

“I personally don’t worry about capitalism; it doesn’t concern me, really. Capital will pretty much always be with us, whether we like it or not. But capital is always the follower, not the leader. Capitalism does not have an inner-character robust enough to be the true basis of a state. No economic system has this. Economics is the queen, now and forever. It is a capricious, protean thing. ”

Once again, do you think that private property is a good basis for statecraft? If yes, your position is much closer to mine than you seem willing to admit.

“Capitalism and corporations are right-wing insofar as meritocracy is right-wing. ”

As if concentration of ownership would not lead to its own, unmerited profits as well… through lobby power, for example. Or through customers being easily manipulatable idiots who commit every possible cognitive fallacy when buying something.

Everything I’m saying here (including the economics) was said by Carlyle more than 150 years ago, notably in Chartism. The apotheosis of the hedonic principle is the immortal Pig-Philosophy. Briefly, Carlyle tells us, the difference between man and beast is that maximization of hedonic utility is always and everywhere the method of a beast. Not coincidentally, it is also the method of a toddler. And it is also the method of the Austrian economist, although he at least realizes that the “utility function” is qualitative and subjective rather than quantitative and objective, and adds time preference.

To Mises and Rothbard, the human being as economic actor is a very smart pig, often willing to exchange less slop today for more slop tomorrow. This is not at all the view of Carlyle – nor is it the view of List. Of course, from the economic perspective of the State, slop production is all that matters. But the human being is not only an economic actor – nor is the State only an agency of production. What we’d really like to see is a model in which there is no tension between Pig-Philosophy (which must be acknowledged as true) and actual human civilization.

The post also contains and interesting discussion of some neoreactionary themes:

We are now in a position to attack the mystery of “growth.” Why, if economic hedonism is such a shallow and easily debunked philosophy, do so many people take “growth” so seriously?

All subterfuges and evasions to the contrary, the basic economic problem faced by 20th-century governments (somewhat less in the 19C; far more in the 21C) is unemployment. The cause of unemployment is simple: in an industrial economy, most human beings are economically useless. They are not productive assets at all. They are liabilities. For a brief transitional period, they could still be used as industrial robots. This period is close to its end.

For instance, suppose a Sam Altman were given plenary power over the US economy, reorganized into One Giant Business. His mission: cut costs, while maintaining production. His methods: eliminate white-collar busywork (real estate agents, lawyers, medical billing clerks, etc); replace human industrial robots with actual industrial robots; and when all else fails, replace high-cost American labor with low-cost Indians housed in barracks and fed only on lentils, Dubai style.

Does anyone doubt that aggressive and autocratic application of these methods could reduce US employment by 5 to 10 percent a year for at least a decade? Indeed, as the Singularity nears, the future of work becomes clear – there is an IQ threshold below which any human, no matter how cheap to feed, is a liability. Classic unskilled manual labor remains productive in some domains – gardening, housecleaning, and so on. Perhaps this will be true for another decade or two. It will not be true indefinitely. As the machines get smarter – assuming they get smarter – the threshold will rise. Eventually, the only human beings worth employing will be Sam Altman and his friends. Then, at last, even they will be laid off. Universal unemployment is the definition of the Singularity.

Now, it’s important to note that from a strictly economic perspective, there is no problem here at all. The absolute State as Pig-Philosopher has a simple answer. As Stalin put it – no person, no problem. These surplus human robots can simply be sacrificed, like worn-out lab mice. At this point they stop being liabilities and become assets again, since they can be sold as organs or at least organ meats. Certainly, when the State itself becomes a computer, this logic will be irresistible. Let’s call this approach to human liabilities Solution A.

From a political perspective, Solution A is a nonstarter. Hopefully it will always remain a nonstarter. If we are entirely wedded to Pig-Philosophy, we can explain this by saying that sacrificing human liabilities (especially within earshot) actually damages the capital value of the non-sacrificed pigs, because it terrifies and demoralizes them. But is this true? Might it not motivate them, instead? Whatever. There are more things in my philosophy than pigs, and yours too as well, and while I am quite willing to take a King I draw the line at a Computer-King – especially if the Computer-King is programmed entirely with Pig-Philosophy. Since I am more tolerant in this regard than most, I just don’t see Solution A happening.

Yes it is. What is true on the level of the system does not have to be true at the level of its individual units. They are constituted in this way because, supposedly, it is the most efficient one. Although nowadays, with government subsidies and bailouts who cares about efficiency that much?

In the past several decades there have actually been a lot of corporations who decentralized their decision making because they found it more optimal. Others do not find it as optimal. A lot of times how centralized or decentralized the organization of the corporation is depends on the specific industry in which it operates.
Corporations are someone’s private property. Being someone’s private property a top-down centralized approach to handling them is what comes naturally. There is nothing odd in that.
I think the problem here is you might have a misguided idea of the market. The market is actually (crudely speaking) a bunch of command and control units interacting with each other. That’s what private property is about – private and exclusive control. But while this command and control is functional on the level of the units, its absolutely not at the level of the whole system. Those are two different spheres of analysis.

The market, according to its usual definition, is just that place where economic entities come to trade goods. There’s no necessary reason why those entities should consist of large corporations. But the fact is, in the modern would, they do (amongst other things), and therefore, whole swathes of the economy are not the result of the invisible hand of the market, but are planned from the top down by hierarchical management structures.

And what of it? Well, we exist partly–as consumers, for example–in a market economy, and partly–as employees, for example–in a planned economy. But planned economies are generally thought to be a bad idea. Why are Oracle and GE successful yet the Soviet economy is a historical folly? Isn’t central planning of economic activity totally inefficient? What gives?

Because one operates on the level of units, the other was attempted (unsuccessfully) at the level of the system. Did you miss like 80% of my previous comment or are you being purposefully glib?

You need prices to be able to perform economic calculation. Without prices, no accounting can be done, no profitable top-down approach is even conceivable. That is why you cannot have central planning on a system-level, because you would have no price system and without a price system you simply do not know what the fuck you are doing. Even the communists had to keep prices and could never actually achieve complete central planning for the whole economy, because at some point they realized how retarded and inefficient it is, so they had to be content with only massively distorting prices, which was also a massively retarded and inefficient arrangement, but at least it kept the economy afloat for several decades.

Let me make this easy for you, think of it this way (this is an allegory and should not be taken as a completely literal explanation)- there are diminishing returns to everything. Top-down planning is efficient in individual households, corporations and etc. on the level of the interacting units in a market economy, but it is not efficient at the level of the whole economic system itself.

There is a qualitative difference between central planning on the level of the units and on the level of the system. Central planning on the level of the units is efficient insofar as those units exist and interact in a system which is not centrally planned and which has a price system in place determined by the interaction of the individual units.

To say that huge amounts of economic activity can be planned, Soviet-style, just because it occurs within something called a “unit”; which is that which is able to successfully plan economic activity, is merely to advance a tautology. Why are “units” (corporations whose total revenue in many cases exceeds the GDP of small countries) able to efficiently plan their operations without the use of the market? If you don’t see that there is something curious to be explained here, then curiosity about our economy is obviously not your thing.

“Mike Munger, of Duke University, talks about why firms exist. If prices and markets work so well (and they do) in steering economic resources, then why does so much economic activity take place within organizations that use command-and-control, top-down, centralized structures called firms? Within a firm, most of the goods and services that the workers use are given away rather than allocated by prices–computer services, legal services and almost everything else is not handed out by competition but by fiat, decided by a boss. A firm, the lynchpin of capitalism, is run like something akin to a centrally planned economy. Munger’s answer, drawing on work of Ronald Coase, is a fascinating look at the often unseen costs of making various types of economic decisions. The result is a set of fascinating insights into why firms exist and why they do what they do.”

“Why are “units” (corporations whose total revenue in many cases exceeds the GDP of small countries) able to efficiently plan their operations without the use of the market? ”

Without the use of the market? Are you trolling? Or are you really THAT stupid?
Firms rely on prices to be able to calculate what to produce and how to produce it most efficiently. They might run their internal operations command and control style, but for those operations to be efficient they need market prices and profit and loss accounting. And for that you need a market.

Seriously, stop trying to be smart on the internet and go read a book on economics.

vimothy Reply:April 5th, 2015 at 9:45 am

“Reading a book on economics” is what introduced me to the problem in the first place. It’s something that has puzzled economists (such as the late Ronald Coase) for some time.

Yes, in the main, fims plan their operations without the use of the market (from Peter’s link):

“Within a firm, most of the goods and services that the workers use are given away rather than allocated by prices–computer services, legal services and almost everything else is not handed out by competition but by fiat, decided by a boss.”

When the price system works properly, the market allocation of resources cannot be improved on (in some sense — this is a result from general equilibrium theory, which is not exactly robust, but does seem to capture something that is generally true). It’s also the case that central planning has been a historical failure. This makes the existence of firms rather odd, because it implies that huge amounts of economic activity is planned, and has little to do with quote-unquote efficient market allocations.